The Hindu Business Line : Bharat Coking profit plunges in '06-07 fiscal

Kolkata April 4 Even as Bharat Coking Coal Ltd (BCCL), the Dhanbad-based subsidiary of Coal India Ltd (CIL), is confident that the company will be able to come out from the purview of the Board for Reconstruction of Public Sector Enterprises (BRPSE) during the terminal year of the 11th Plan (2011-12), its profitability in 2006-07 fiscal nose-dived due to "unmanageable" increase in production cost.

Though the company's total production increased by 3.8 per cent to 24.2 million tonnes (mt) compared with 23.31 mt in 2005-06, profit declined from about Rs 202 crore to about Rs 21 crore during the fiscal ended March 2007. The year 2006-07 has begun with a pithead coal stock of about 4 mt.

Highlighting the company's physical and financial performance, the Chairman & Managing Director, Mr Asoke Kumar Paul, told newspersons here on Wednesday that the drop in coking coal production from 4.22 mt in 2005-06 to 3.26 mt in 2006-07 had been responsible for decline in washed coal production.

Consequently, production of washed coal declined from 2.29 mt to 1.66 mt and profitability of washeries reduced from about Rs 293 crore to about Rs 91 crore.

BCCL, one of the consistently loss-making subsidiaries of CIL, turned around only in 2005-06 with a maiden profit of about Rs 202 crore. Although the company's profit margin suffered considerably in 2006-07, Mr Paul felt that this was a temporary phenomenon. In fact, it was very much in line with the company's revival plan.

Capacity expansion

He said the company planned to make fresh investment of about Rs 1,350 crore in the 11th Plan to augment its total production to about 30 mt from the current 24 mt. It plans to create additional mining capacity of about 1 mt each fiscal to reach the production target by 2011-12. Of the total production target, coking coal would be about 4.8 mt.

Mr Paul said BCCL had plans to develop a two-million-tonne per annum capacity new coking coal plant in a 50:50 joint venture, entailing an investment of about Rs 500 crore. It would shortly float a global tender inviting expression of interests (EoIs) from prospective partners. This apart, it has plans to set up two small gas-based power plants each with a capacity of 10 MW, utilising methane gas to be extracted from the Moonidih coal bed methane pilot project.

He added that the company would close down a total of 41 uneconomic underground mines in phases. The existing employees of these mines would be deployed in other projects.